Bank of America is getting back into the foreclosure game, restarting operations in 23 states and promising to get things running in the rest fairly soon. Whether the judges will accept the revised paperwork is unclear. Same goes for the political system.

There are some efforts among House members to do more right now, an impulse the administration is wary of. They've argued that a national moratorium on foreclosure will further harm an already fragile market. But they haven't developed an alternative policy, or even a definition of the problem such that we'll know when it's solved.

Asking the banks to figure this out on their own won't strike voters as terribly credible because the base of the problem here was that the banks -- and their procedures -- have not proven credible. Letting the courts decide on a case-by-case basis doesn't make for great policy. By and large, the White House has resisted entangling itself in the mortgage mess, but that seems as much an opportunity missed as a problem avoided, and now, as banks assure us that they've devised an acceptable solution, it's leaving a lot of people looking at their political leadership and wondering why Bank of America gets to make this call.

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Bank of America has revoked its foreclosure freeze in 23 states, report Zachary Goldfarb and Ariana Eunjung Cha: "If judges approve the new filings, the bank expects that the sales of foreclosed properties will start up once again in the states where a court order is needed to foreclose on a home. The bank said it will continue to freeze foreclosure sales and review files in the District of Columbia and the other 27 states, including Maryland and Virginia, which do not require a judge's action...But it is unclear whether the courts will accept the new paperwork. Some judges have said in interviews that they are considering throwing out entire cases and making the banks file new ones, which would be costly and time-consuming."

Congressional Democrats and Republicans are taking action on the foreclosure mess independent of the White House, reports John Maggs: "Administration officials are wary of a backlash from liberal Democrats and progressive groups unhappy that the government hasn’t been more successful convincing banks to renegotiate mortgages for homeowners who can’t keep up with their payments...Behind the scenes, Republicans are consulting with the banks, which are hoping to reach a quick settlement with attorneys general from all 50 states who have announced a joint investigation into home foreclosures. The settlement would involve a sizable fine and some basic reforms to the foreclosure process."

The tax rebate in the stimulus package has gone largely unnoticed, reports Michael Cooper: "In a New York Times/CBS News Poll last month, fewer than one in 10 respondents knew that the Obama administration had lowered taxes for most Americans. Half of those polled said they thought that their taxes had stayed the same, a third thought that their taxes had gone up, and about a tenth said they did not know....Actually, the tax cut was, by design, hard to notice. Faced with evidence that people were more likely to save than spend the tax rebate checks they received during the Bush administration, the Obama administration decided to take a different tack: it arranged for less tax money to be withheld from people’s paychecks."

Still to come: Another Fed leader leans toward action; environmentalism isn't hurting midterm candidates; a ruling about health care reform's constitutionality will come before year's end; and a sleep-barking puppy.

Economy/FinReg

Atlanta Fed president Dennis Lockhart is leaning toward more aggressive action, reports Michael Derby: "In offering his support for further Fed action, Lockhart noted it isn’t just credit availability where another round of so-called quantitative easing could work. He noted that by acquiring more Treasurys, the central bank could drive some investors into riskier and potentially more economically productive holdings, like corporate bonds. Lockhart noted a restarted bond-buying program could also affect the dollar. Market speculation 'has already caused a drop in the dollar’s value on exchange markets and contributed to the rising concern over competitive efforts among nations to influence the relative position of currencies,' he said."

Opposition to free trade deals can be a political liability in Latino-heavy districts:http://bit.ly/9KLnST

The Fed is hurting the recovery by allowing Congress to defer action, writes David Malpass:http://bit.ly/a3KAq0

Economic inequality is a socially driven phenomenon, writes Robert Frank: "People do not exist in a social vacuum. Community norms define clear expectations about what people should spend on interview suits and birthday parties. Rising inequality has thus spawned a multitude of 'expenditure cascades,' whose first step is increased spending by top earners. The rich have been spending more simply because they have so much extra money. Their spending shifts the frame of reference that shapes the demands of those just below them, who travel in overlapping social circles...These cascades have made it substantially more expensive for middle-class families to achieve basic financial goals."

American quantitative easing and Chinese currency deflation aren't comparable, writes Paul Krugman: "China isn’t fighting deflation -- it’s fighting inflation, so the undervaluation of the yuan has to be accompanied by restrictive credit policies domestically. (China can separate exchange rate policy from domestic monetary policy because it has capital controls). The overall effect of the policy is therefore to reduce, not increase, world demand -- and the effect on foreign economies is clearly negative. The policies, then, aren’t at all equivalent."

A poll suggests support for cap and trade won't hurt at the ballot box, reports Darren Samuelsohn: "The Natural Resources Defense Council Action Fund surveyed voters in 23 congressional districts considered to be close races this November. Automated telephone calls asked whether the voters were likely to support a House candidate who supported legislation that would 'create millions of new jobs, reduce our use of foreign oil, hold corporate polluters accountable and cut the pollution that causes climate change' -- all talking points used by sponsors of the legislation. The environmentalists found good news for the incumbents in 21 districts."

Appealing to energy independence may persuade voters more than appealing to climate change, reports Leslie Kaufman: "If the heartland is to seriously reduce its dependence on coal and oil, Ms. Jackson and others decided, the issues must be separated. So the project ran an experiment to see if by focusing on thrift, patriotism, spiritual conviction and economic prosperity, it could rally residents of six Kansas towns to take meaningful steps to conserve energy and consider renewable fuels...The project’s strategy seems to have worked. In the course of the program, which ended last spring, energy use in the towns declined as much as 5 percent relative to other areas -- a giant step in the world of energy conservation, where a program that yields a 1.5 percent decline is considered successful."

Conservation programs can boost growth in poor countries, writes Rebecca Tuhus-Dubrow: "A report released in August, by the Nature Conservancy and other groups, reviewed more than 400 studies and documents about the poverty-biodiversity nexus. The authors identified 10 strategies that appeared to have succeeded, in some places, at combining both objectives. The most effective included ecotourism, agroforestry (integrating trees and agriculture), and 'fish spillover' (in which an area is designated off-limits for fishing, while an adjacent water body is fair game)."

Not just "environmentalists" back action on climate change, writes David Roberts:http://bit.ly/caC9gI

A judge will rule by year's end on health care reform's constitutionality, reports Janet Adamy: "In a two-hour hearing here, U.S. District Judge Henry Hudson pressed both sides on a case that could reshape the sweeping health law President Barack Obama signed in March. The case, one of 20 filed so far challenging the law, is considered among the most crucial because it is the furthest along of the state-led lawsuits...Judge Hudson's sharp questioning offered some clues as to how he views each side's case. He showed sympathy for the plaintiff's contention that requiring Americans to carry health insurance amounts to regulating "inactivity," and that Congress lacks such a power."

Medicare's attempts to reduce surgical complications could be more effective, reports Thomas Burton: "The University of Michigan researchers took six types of surgery with a high risk of death or complications and looked at Medicare patients' death and complication rates from 325,052 such surgeries at 2,189 U.S. hospitals over two years. They found little correlation between those rates and how well hospitals complied with Medicare's process measures, which are published on an agency website called Hospital Compare. 'Currently available information on the Hospital Compare website will not help patients identify hospitals with better outcomes for high-risk surgery,' the researchers, who include surgeons and medical-outcomes specialists, wrote in their study."

Education reform isn't a "war on teachers", writes Eric Hanushek: "This is not a war on teachers en masse. It is recognition of what every parent knows: Some teachers are exceptional, but a small number are dreadful. And if that is the case, we should think of ways to change the balance. My research--which has focused on teacher quality as measured by what students learn with different teachers--indicates that a small proportion of teachers at the bottom is dragging down our schools. The typical teacher is both hard-working and effective. But if we could replace the bottom 5%-10% of teachers with an average teacher--not a superstar--we could dramatically improve student achievement. The U.S. could move from below average in international comparisons to near the top."

Campaign spending isn't determinative of elections, writes David Brooks: "Political scientists have tried to measure the effectiveness of campaign spending using a variety of methodologies. There is no consensus in the field. One large group of studies finds that spending by incumbents makes no difference whatsoever, but spending by challengers helps them get established. Another group finds that neither incumbent nor challenger spending makes a difference. Another group finds that both kinds of spending have some impact. But there’s no evidence to suggest that campaign spending has the outsize role that the candidates, the consultants and the political press often imagine."

Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews, Mike Shepard, and Michelle Williams.

It took me a good half second after the backup dancers started going before I realized that they were not also robots. For that half second, I was blown away. That robot is still impressive though, and the progress of the last ten years is pretty damn amazing. Makes me think we may have anthropomorphic robots in our daily lives in my lifetime.

"Obama is suffering from his lack of focus on job creation, writes Bob Herbert"

So, I was reading this on the train coming down to work this morning and kept repeating the word "suffering" to myself over and over like a crazy person.

Whatever Barack Obama's political problems, at the end of the day, he makes $400K/yr, has round the clock medical care available for him and his family, a 747 jet with a pilot on standby to go anywhere in the world, a guaranteed pension and a beautiful home in my former neighborhood in Chicago when he leaves office....he aint suffering.

Eric Hanushek's article is spot on. Just like every profession there are great teachers and there are not so great teachers. The only thing that I think most conservatives ask for is that like every other profession that the bad ones are able to get weeded out as opposed to tenure being in place to allow the bad teachers to remain and then a little accountability can go a long way.

As noted in one of Klein's link above, even groups advocating the Obama/Pelosi PPACA now acknowledge that current president "Obama was certainly obscuring the picture" regarding health care reform.

It is a fact that "between 2014 and 2019,
total state spending on Medicaid will increase by $22 billion, 1.4 percent more than they would have spent in the absence of the new law" and that the "CBO projects that policies bought on the individual market will be 10 percent to 13 percent higher in 2016 than they would have been without the law".

"The law does signal a sharp expansion of the federal government's involvement in health care."

The defective mortgage paperwork will ultimately be likely to make a difference in recourse states, and will impact the lenders' ability to obtain a deficiency judgment against the debtor, but will not likely affect the foreclosures themselves.

After all, the debtors are in default and most of them put little or nothing into the house and will have lived in the house rent free for some months preceeding the foreclosure. There's no compelling reason for the feds to interfere in the foreclosure process, and very compelling reasons for them to stay out of it.

And I doubt very much that the lenders, already overwhelmed with the foreclosure process, will undertake to pursue deficiency judgments against most debtors. Instead, they will probably package up all of their paper and sell it for pennies on the dollar to groups of vultures who will then go after the debtors. That's where the bad paperwork is going to make a big difference.

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